The market has finally rallied. While the S&P 500 and its tracking exchange traded fund, SPY, has rallied over 20% from the market lows of last year, and market leaders such as Apple (AAPL), are up over 30% this year, many leading bulk and industrial metal companies, such as Freeport-McMoRan (FCX), remain weak.

As I wrote in my suggesting that Freeport-McMoRan had significant upside, this nearly $33 billion company has sold-off hard over the last year on weakening Chinese demand for the red metal, and labor issues, and a strengthening dollar.

Reaching a short-term bottom in late June, Freeport-McMoRan has rallied around 10% in the last month to around $35 a share, as the S&P 500 and most of the major indexes have moved higher as well, with market leaders such as GE (GE), Caterpillar (CAT), and Citigroup (C), rallying particularly hard of recent.

Freeport-McMoRan's biggest problem over the last year has been the labor dispute at its Gasberg mines in Indonesia, which are the world's largest copper mines. While Freeport obviously is particularly acutely affected by copper prices since the company hedges very little of its production, the weakness in copper prices are the least of this company's worries today.

Indeed, while copper, oil, and most major industrial commodities and bulk metals rise and fall, Freeport McMoRan's specific and largest problem has been the continued and significant labor disputes the company has faced in Indonesia.

Obviously, labor disputes are not new issues for company's used to operating in emerging market economies and underdeveloped regions throughout Africa, Asia, Latin and South America, and elsewhere. Still, Freeport McMoRan's Indonesian operations are central to the companies short-term and long-term goals.

Freeport-McMoRan got nearly 30% of its copper production from Indonesia, and the company's production numbers in this country were down nearly 50% in the first quarter. Freeport-McMoRan has also forecast is production numbers for 2012 to drop around 18% from last year.

This is why I think the talk of the IPO is so troublesome. Freeport-McMoRan not only has gotten nearly 30% of its copper production from its Indonesian operations, but the company has also gotten the highest grade Copper from its Gasberg mines.

Freeport-McMoRan's recent discussions with Indonesian labor leaders, many who are known to have ties to the Indonesian government and military, showed this company has zero bargaining power in the country where its strongest mines are positioned. Freeport-McMoRan not only agreed to a 40% two year wage increase, the company also paid 3 months wages up front and agreed to pay additional education, retirement, and living costs. Freeport-McMoRan's year-over-year costs in Indonesia rose by over 450% in the fourth quarter of 2011 primarily because of the company's labor concessions to unions this past year.

Essentially, the company was forced to bribe workers and union leaders with huge payouts rather than entering into a fair and longer-term labor agreement. Despite Freeport-McMoRan's huge concessions, the company was still unable to reach a long-term labor pact with union leaders, as the company was able to in Peru this past year.

To conclude, well IPOs are sometimes timed at the top of a market, company's obviously also often look to use pubic offering to spin off less profitable operations. This is why energy company's such as Marathon Oil (MRO) spun off its, Chevron (CVX), and Exxon-Mobil (XOM), have been increasingly looking to spin-off refining operations. Well, obviously, there are many reasons for an initial public offering, the timing of Freeport McMoRan's recent IPO strongly suggest the company's essential and troubled Indonesian operations will remain challenging for some time.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.